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COVID-19 wreaks havoc on PTO policies: 3 possible fixes

experts suggest altering plans to prepare for year end
Rachel Mucha
by Rachel Mucha
July 22, 2020
3 minute read
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The coronavirus pandemic has affected nearly every aspect of business. And as the summer months pass, another issue is being brought to light: Employees aren’t using their vacation time.

Because of COVID-19 and the risks involved with traveling – and also worries about job security – many employees are rescheduling or outright cancelling vacation plans. And this spells trouble for employers.

Use it or lose it?

The biggest issue cropping up is employees are accruing a large amount of PTO. And if your company has a use-it-or-lose-it policy, your workers are put in a tough spot. Not wanting to lose their vacation days, employees could start taking time off all at once – leaving you with a potential staffing shortage.

Some employees intend to save their PTO for the very end of the year in hopes that travel will be safer.

This also is a problem for employers, who will likely see an abundance of staff absences at the end of the year – arguably the busiest season for most companies. And after many businesses took a big financial hit when the pandemic first began, most employers are banking on making up for bad numbers in the fourth quarter.

It’ll be difficult to do that, however, when your employees are worrying about using their vacation time at the last minute.

Making adjustments

To avoid a frantic rush to use vacation time at the end of the year, it’d be wise to make adjustments to your PTO policies now.

Here are some of your best options from three industry pros – HR consultant Rich Fuerstenberg; Jamie Coakley, VP of people at Electric; and Paul McDonald, senior executive director at Robert Half.

1. Change your rollover rules. One potential fix to the accrual dilemma is to put a pause on your use-it-or-lose-it PTO policy. By allowing your employees to hang onto all of their earned vacation days into the new year, there won’t be a mad rush to use them come November and December.

According to Robert Half, some employers have already taken this route, but the majority haven’t. McDonald says companies should really consider this change. It’ll keep your company staffed at the end of the year, and your employees will be happy to hear they won’t be losing their hard-earned time.

2. Ask employees to use time now. The simplest solution, obviously, is to encourage your people to use their PTO now, regardless of whether they can travel.

The risk with this, however, is employees could resent being forced to use PTO when they can’t travel.

To get past this, you can emphasize the reason behind the request is the wellbeing of your employees. With so many working remotely during a global pandemic, employees are likely stressed and burned out.

By encouraging your people to take a “staycation” and step away from work for a week, they’ll come back relaxed and refreshed – which is a win for both employers and employees.

According to a Robert Half survey, 25% of employers are taking this route to solve their PTO problems.

3. Rethink your entire PTO policy. Now is a great opportunity to do a complete overhaul of your vacation policy – especially if you were considering it before the pandemic.

One alternative to a use-it-or-lose-it policy? An unlimited PTO policy.

This type of policy avoids issues with too much accrual, but still allows employees to take time when they need it.

Some employers are hesitant to embrace unlimited PTO plans due to fears of employees abusing them and taking too much time off. But studies have shown that very few people take advantage of these policies – and actually still need encouragement from managers to take time off.

Rachel Mucha
Rachel Mucha
Rachel writes about Human Resource management and has been a member of the HRMorning staff since 2017. She is a graduate of Ithaca College.

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